Shares in Goodfood Market saw a sharp increase on Tuesday morning as the Canadian online meal solutions company upgraded its expectations for the full year. This decision comes after the company reported better-than-expected revenue and a reduced loss in its fiscal third quarter.
At 10:16 a.m. ET, shares were up over 16% at 53 Canadian cents (40 cents), slightly lower than the earlier high of C$0.56.
Goodfood Market now predicts positive adjusted earnings before interest, taxes, depreciation, and amortization for the full fiscal year. This revised forecast is achievable due to a leaner cost structure, which is expected to lay the foundation for growth in fiscal 2024.
Chief Executive Jonathan Ferrari expressed enthusiasm for the company’s progress, stating, “Fueled by our leaner cost structure, we also delivered positive adjusted Ebitda of C$3 million for a second consecutive quarter, and an adjusted Ebitda margin of nearly 8%.”
In the third quarter ending on June 3, Goodfood Market reported a narrower loss of C$1.2 million, or C$0.02 per share, compared to a loss of C$21.1 million, or C$0.28 per share in the same period last year. The improved results can be attributed to reduced wages and salaries in cost of goods sold and in selling, general, and administrative expenses. Furthermore, lower food costs and marketing spend also contributed to this positive outcome.
Although net sales for the quarter were down to C$42.1 million, a 37% decrease from the previous year, analysts had anticipated an even greater decline to C$40.1 million.
Goodfood Market has strategically shifted its focus towards attracting and retaining customers that yield higher gross margins and adjusting customer behaviors. These changes have proven successful and have paved the way for the company’s optimistic outlook.